The Worthy Quest to Kill Off Checks in the Next 10 Years

In the 21st century, what could be more ridiculous than checks? Little pieces of paper upon which incredibly sensitive information is printed in a font from the punch-card era of computing. Sign your name and, voilà, the paper becomes money!

Aside from the obvious security problems, checks don’t fit well into today’s digital buying-and-selling infrastructure. For checks, verification depends on trust in a way that credit, debit, online transactions don’t (not to mention cash). At a time when most people shopped locally and personally knew the merchants they were buying from, checks made sense. Your signature was your word to your village that you were good for the money. Checks were a formalized version of a note saying “I’ll gladly pay you Tuesday for a hamburger today.”

Today, how many gas stations, convenience stores, restaurants, pharmacies and any other shop take checks? Even if they do, it’s only grudgingly. Even with advances like mobile deposit-by-photo, a check transaction is simply more work.

There’s still at least one segment of the economy where checks are still prevalent — that is, unless Bill Clerico has his way. Clerico is the co-founder and CEO of WePay, another player in the crowded mobile payments space that has targeted a specific market he thinks will set his company apart. Dog walkers, maids, contractors, wedding photographers, landscapers, piano teachers: paying what Clerico describes as the millions of service-providing small businesses and self-employed workers with a check still tends to make sense. The dollar amounts tend to be too high for cash, and the transactions are relatively intimate: These are people who’ve put in time to do something for you. Often they’ve been to your home. They know your family. You’re likely to see them again.

In that context, taking a check seems more reasonable. But Clerico believes WePay offers a better option. Today the company is launching its first mobile app that allows independent service providers to invoice their clients directly from their phones. Those clients can then click to pay those invoices on the web through either a desktop or mobile site.

Until today, WePay only offered the invoicing option through its website, as well. Clerico says that sometimes led to the situation where service providers would use WePay on the web but rely on the card reader of competitor Square when taking payments in person. What’s more, he says many small business owners these days aren’t using desktops or laptops at all.

“They run their whole business off their iPhones,” he says.

As more small businesses move in that direction, the need for checks should shrink even more. The story will likely be not whether checks survive, but which platform succeeds at replacing them. Clerico believes WePay’s invoicing feature sets it apart from Square for his target market.

Regardless, Clerico predicts checks will be dead in a decade. “Checks,” he says, “aren’t good for anyone.”